British diamond miner Firestone Diamonds with operation in Botswana and Lesotho reported consolidated 2.8 million British pounds (4.7 million U. S. dollars) in net cash for the six months ended Dec. 31, 2013, compared to 4. 2 million pounds (7 million dollars) in the first half.
Firestone said on Friday that the slop was due to the closure of its pilot plant at Liqhobong, Lesotho.
Liqhobong is located in the Lesotho-highlands where the company has a 75 percent interest and the remaining interest is held by the Government of Lesotho.
Liqhobong ceased production last October in preparation for the start of the construction phase of the main treatment plant (MTP).
"The production, prior to the closure of the Pilot Plant, was from lower grade ore blocs and stockpiled low grade material," said Lucio Genovese, Non-Executive Chairman of Firestone.
"This production was sold at two tenders held at the World Diamond Center in Antwerp. The tender results were, as expected, less than pleasing due to the lower quality nature of the diamond parcels."
Firestone indicates that a total of 58,086 carats were sold which included lower quality inventory, achieving an average sales price of 69 U.S. dollar per carat and the company achieved a revenue of 2.6 million pounds, which is 2.5 million pounds lower than the first half of 2013 of 5.1 million pounds as a result of lower volumes and quality of diamonds sold during the period.
According to Firestone, an experienced project management team who will be responsible for delivering and building the MTP at Liqhobong, on time and on budget and for appointing, as appropriate, the key engineering, procurement, construction and maintenance contractors will be put in place.
The MTP at the Liqhobong Mine is expected to prop up the mine into becoming a plus-one million carat per annum producer.
Meanwhile the company's BK11 Mine in Botswana remains on care and maintenance at a cost of 29,000 pounds per month.
Firestone says it's board is considering various strategic alternatives for its Botswana operation and exploration portfolio, including disposal or joint venture, but it recognizes that extracting fair value from the asset in the current market could be challenging.
The British developer suspended operations at BK11 in the Boteti Sub-District of Botswana last year citing operational challenges and weak market demand. The move resulted in the retrenchment of 143 workers, with 15 being retained for care and maintenance activities.